Multiple Beneficiaries of Inherited IRA

Submitted by William Buerger on Mon, 2018-11-12 23:17

Husband passed away several years ago with spouse inheriting his IRA with RMD requirements. Spouse’s 2018 RMD is $4,000, but she passed away after only withdrawing $2,100. Her three children were her beneficiaries; two inheriting 40% and one inheriting 20%. All three children opened their own inherited IRA’s and transferred-in their respective shares of their mother’s account. Two of the children have not taken any distributions but the third child has withdrawn $5,000. Does the third child’s withdrawal of $5,000 satisfy the remaining $1,900 RMD of the mother, or do all three children have to take a withdraw in 2018 based on their percentage of the inheritance to cover the remaining RMD of $1,900 ?



Submitted by Alan - IRA critic on Tue, 2018-11-13 01:36

  • The year of death RMD is the joint responsibility of the beneficiaries. Therefore, if one of them distributes enough to complete the year of death RMD, the others do not have to withdraw anything until their beneficiary RMDs start in the following year.
  • Another question here is whether the children are correctly treated as designated beneficiaries of mother or successor beneficiaries. This makes a big difference in their beneficiary RMDs.  If mother maintained an inherited IRA instead of rolling it over, the children may be successor beneficiaries. But if she failed to take her full beneficiary RMD in any year prior to this year, she would have become the default owner. You did not indicate whether she rolled this over to her own IRA or not.

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